Ally's walkout means trouble for government

Coalition split by foreign investment plan

September 19, 2012

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The government and its economic reforms have run into trouble after a key ally yesterday announced it is quitting the Congress-led federal coalition. The Trinamool Congress (TMC), a major ally of the 11-member United Progressive Alliance (UPA) took the decision in protest against Prime Minister Manmohan Singh’s plans to allow foreign direct investment (FDI) in civil aviation, power and especially retail markets. The TMC move will leave the government with a minority of seats in the Lok Sabha people’s council, the lower house of parliament, forcing it to rely on smaller parties to remain in power. “The FDI retail plan is against small shopkeepers and will kill farmers,” TMC leader Mamata Banerjee told reporters in Kolkata yesterday. Banerjee, who is currently chief minister of West Bengal, also criticized the government for a hike in diesel prices and the introduction of a cap on the use of subsidized cooking gas, branding them "anti-people measures." She said her party was quitting the UPA since the alliance “never took us into its confidence before taking the decision on the price hike.” Banerjee had given the government an ultimatum threatening to quit the UPA if the reforms were not dumped by yesterday. She said her party’s ministers in the federal government will all resign on Friday. Banerjee, known for her maverick style, is often praised and castigated in equal measures. One of the outgoing federal TMC ministers, Sultan Ahmed, has called on the government to resign and for new elections. The next general election is not due until 2014. Congress continues to maintain that Banerjee is a “valued ally.” However, the main opposition Bharatiya Janata Party (BJP) called her departure “the beginning of the end of the UPA.” The opposition has called for a countrywide shutdown tomorrow to protest against FDI investment and the hike in cooking gas prices. The government says it will not roll back the reforms. BJP leader Prakash Javedkar told ucanews.com that the government is being guided by sheer “arrogance.” Related reports Critics say foreign investment will cripple small businesses

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